SoftBank Group is scrapping an agreement to spend $3 billion (Dh11bn) to buy WeWork stock from former chief executive Adam Neumann and other shareholders, despite threats of legal action from some members of the company’s board.
SoftBank had agreed to buy the shares from Mr Neumann, Benchmark Capital and others as part of a bailout package last year, but notified stockholders in mid-March that conditions for the deal hadn’t been met. The deal’s deadline is 11:59pm New York time April 2.
“The Special Committee of the Board of Directors of WeWork has been advised by SoftBank, the controlling shareholder of WeWork, that it will not consummate the tender offer which it agreed to in October of 2019,” the committee, made up of Benchmark’s Bruce Dunlevie and another director, Lew Frankfort, said in a statement. “The Special Committee is surprised and disappointed at this development, and remains committed to reaching a resolution that is in the best interest of WeWork and its minority shareholders, including WeWork’s employees and former employees. The Special Committee will evaluate all of its legal options, including litigation.”
SoftBank shares rose as much as 2.5 per cent while the broader Japan market fell. The company didn’t respond to requests for comment.
The share purchase was hammered out in October as part of SoftBank’s rescue of WeWork, after the co-working company’s failed initial public offering left it weeks away from running out of money. In the deal, the Japanese conglomerate would have taken a stake of almost 80 per cent in the company and buy $3bn in shares from investors as well as current and former employees.
Mr Neumann, ousted in the deal, was set to sell up to $970 million in shares. The generous exit package angered many of his employees, thousands of whom had their jobs eliminated in the following months as WeWork parent We Co. tried to cut its expenses.
WeWork signs long-term leases with landlords around the world and then rents that space to smaller companies and freelance workers, a business that has been particularly vulnerable to the coronavirus and economic slowdown. In a letter to bondholders, the company warned it didn’t expect to hit its financial targets for 2020.
In the past few weeks, the shareholder buyout deal has become increasingly contentious. SoftBank sent a letter to WeWork investors saying it could withdraw from the agreement if certain conditions weren’t met by the deadline. SoftBank cited regulatory concerns and a handful of government investigations into WeWork, including from the U.S. Securities and Exchange Commission and the Justice Department.
“Neither SoftBank nor the company can offer any assurances regarding the scope of these investigations, the nature of any actions that these or other regulatory parties will take, or the timing within which they will be resolved,” the Japanese company said in its letter, arguing it has no obligation to complete the tender offer.
The two WeWork independent board directors responded, saying they would consider legal action if SoftBank pulled out. “Its excuses for not trying to close are inappropriate and dishonest,” a spokeswoman for the directors had said in a statement.
The latest deal is separate from SoftBank’s bailout of WeWork itself, a package that included $5bn in new financing and the acceleration of an earlier $1.5bn commitment. Most of the money would have gone to five shareholders, including Mr Neumann and the venture capital firm Benchmark, which was looking to sell $600m in shares, Bloomberg has reported. Less than 10 per cent of the proceeds would have gone to current WeWork employees, SoftBank has said.
Still, the transaction has repercussions for WeWork. As part of the deal, the company would have received $1.1bn in debt financing from SoftBank only if the share purchase is completed.
Separately, SoftBank said it completed the sale of its US unit Sprint to T-Mobile US. The deal removes about $40bn in net debt from the Japanese conglomerate’s balance sheet.
Jeff Buckley: From Hallelujah To The Last Goodbye
By Dave Lory with Jim Irvin
Australia squads
ODI: Tim Paine (capt), Aaron Finch (vice-capt), Ashton Agar, Alex Carey, Josh Hazlewood, Travis Head, Nathan Lyon, Glenn Maxwell, Shaun Marsh, Jhye Richardson, Kane Richardson, D’Arcy Short, Billy Stanlake, Marcus Stoinis, Andrew Tye.
T20: Aaron Finch (capt), Alex Carey (vice-capt), Ashton Agar, Travis Head, Nic Maddinson, Glenn Maxwell, Jhye Richardson, Kane Richardson, D’Arcy Short, Billy Stanlake, Marcus Stoinis, Mitchell Swepson, Andrew Tye, Jack Wildermuth.
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Indika
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The specs
Engine: 2.0-litre 4-cyl
Power: 153hp at 6,000rpm
Torque: 200Nm at 4,000rpm
Transmission: 6-speed auto
Price: Dh99,000
On sale: now
FINAL RESULT
Sharjah Wanderers 20 Dubai Tigers 25 (After extra-time)
Wanderers
Tries: Gormley, Penalty
cons: Flaherty
Pens: Flaherty 2
Tigers
Tries: O’Donnell, Gibbons, Kelly
Cons: Caldwell 2
Pens: Caldwell, Cross
Killing of Qassem Suleimani
More Iraq election coverage:
Zayed Sustainability Prize
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More from Aya Iskandarani
KILLING OF QASSEM SULEIMANI
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
SRI LANKA SQUAD
Upul Tharanga (captain), Dinesh Chandimal, Niroshan Dickwella
Lahiru Thirimanne, Kusal Mendis, Milinda Siriwardana
Chamara Kapugedara, Thisara Perera, Seekuge Prasanna
Nuwan Pradeep, Suranga Lakmal, Dushmantha Chameera
Vishwa Fernando, Akila Dananjaya, Jeffrey Vandersay
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APPLE IPAD MINI (A17 PRO)
Display: 21cm Liquid Retina Display, 2266 x 1488, 326ppi, 500 nits
Chip: Apple A17 Pro, 6-core CPU, 5-core GPU, 16-core Neural Engine
Storage: 128/256/512GB
Main camera: 12MP wide, f/1.8, digital zoom up to 5x, Smart HDR 4
Front camera: 12MP ultra-wide, f/2.4, Smart HDR 4, full-HD @ 25/30/60fps
Biometrics: Touch ID, Face ID
Colours: Blue, purple, space grey, starlight
In the box: iPad mini, USB-C cable, 20W USB-C power adapter
Price: From Dh2,099
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
School counsellors on mental well-being
Schools counsellors in Abu Dhabi have put a number of provisions in place to help support pupils returning to the classroom next week.
Many children will resume in-person lessons for the first time in 10 months and parents previously raised concerns about the long-term effects of distance learning.
Schools leaders and counsellors said extra support will be offered to anyone that needs it. Additionally, heads of years will be on hand to offer advice or coping mechanisms to ease any concerns.
“Anxiety this time round has really spiralled, more so than from the first lockdown at the beginning of the pandemic,” said Priya Mitchell, counsellor at The British School Al Khubairat in Abu Dhabi.
“Some have got used to being at home don’t want to go back, while others are desperate to get back.
“We have seen an increase in depressive symptoms, especially with older pupils, and self-harm is starting younger.
“It is worrying and has taught us how important it is that we prioritise mental well-being.”
Ms Mitchell said she was liaising more with heads of year so they can support and offer advice to pupils if the demand is there.
The school will also carry out mental well-being checks so they can pick up on any behavioural patterns and put interventions in place to help pupils.
At Raha International School, the well-being team has provided parents with assessment surveys to see how they can support students at home to transition back to school.
“They have created a Well-being Resource Bank that parents have access to on information on various domains of mental health for students and families,” a team member said.
“Our pastoral team have been working with students to help ease the transition and reduce anxiety that [pupils] may experience after some have been nearly a year off campus.
"Special secondary tutorial classes have also focused on preparing students for their return; going over new guidelines, expectations and daily schedules.”
The biog
Simon Nadim has completed 7,000 dives.
The hardest dive in the UAE is the German U-boat 110m down off the Fujairah coast.
As a child, he loved the documentaries of Jacques Cousteau
He also led a team that discovered the long-lost portion of the Ines oil tanker.
If you are interested in diving, he runs the XR Hub Dive Centre in Fujairah
Heather, the Totality
Matthew Weiner,
Canongate
The%20Killer
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COMPANY PROFILE
Company name: Happy Tenant
Started: January 2019
Co-founders: Joe Moufarrej and Umar Rana
Based: Dubai
Sector: Technology, real-estate
Initial investment: Dh2.5 million
Investors: Self-funded
Total customers: 4,000
